The possibility of sanctions for beneficiaries of basic insurance leads to a higher incidence of entry into employment
The mere possibility of sanctions, according to a study, leads recipients of basic security to take up employment more frequently. This is shown in an analysis published on Tuesday by the Institute for Employment Research (IAB). The transition rate into employment increases the more likely the actual imposition of sanctions is - but only up to a certain point.
The institute, affiliated with the Federal Employment Agency (BA), spoke of an "ex-ante effect", i.e., an impact already in anticipation of expected or feared disadvantages. Differences in the application of sanctions by teams of employment experts were examined. If the probability of sanctions increased from one to ten percent, the monthly transition rate into employment for benefit recipients increased by about 0.5 percentage points, given similar characteristics.
In this group, the study found that transitions into qualified employment relationships increased significantly, as did the average income from employment. However, beyond a sanction probability of ten to 20 percent, only a slight further increase in the transition rate into employment was observed. However, jobs with lower quality and lower income were also accepted more frequently.
"The findings of the study speak for a balanced application of sanctions that increases transitions into employment and also has positive effects on employment quality and the development of income from employment," explained IAB researcher Markus Wolf. While sanctions do lead to more employment, the effect is barely strengthened by very intensive sanctions, but the measures come at the cost of employment quality.
The study is based on data collected between April 2012 and March 2013. Cases of employable recipients registered as job seekers aged between 25 and 57 were evaluated. The results cannot be transferred to the effect of benefit reductions of the now introduced citizen's income without further investigation.
The possibility of increased sanctions motivates benefit recipients to seek employment more frequently, as demonstrated by the study. Beyond a ten to 20% probability of sanctions, while the transition rate into employment slightly increases, lower quality jobs are also more commonly accepted.
